IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

FAHS-ROLSTON PAVING

CORPORATION

:

:

:

 Plaintiff : CIVIL ACTION

 :

vs. :

: NO. 05-CV-5082

AMMANN & WHITNEY

PENNSYLVANIA, INC.

:

:

:

 Defendant :

MEMORANDUM OPINION & ORDER

GOLDEN, J. AUGUST 14, 2007

Before the Court is defendant’s motion to dismiss the tortious interference with

contractual relations, misrepresentation, and punitive damages claims of plaintiff’s Amended

Complaint for failure to state a claim. The Court will deny the motion for the reasons that

follow.

BACKGROUND

This dispute arises between two parties working together to build a bridge across the

Delaware River. The Pennsylvania Department of Transportation (“PennDOT”) awarded a

contract to build the bridge to plaintiff, and plaintiff subcontracted with defendant to design the

bridge. The bridge is now several years late under plaintiff’s contract with PennDOT, and

PennDOT is seeking liquidated damages against plaintiff. Plaintiff alleges that its difficulties in

completing the bridge are due in large part to defendant’s failure to deliver a proper design plan

on time. On June 28, 2007, the Court granted plaintiff leave to file an Amended Complaint,

which alleges that, in addition to delivering an untimely and deficient design plan, defendant

Case 2:05-cv-05082-TMG Document 51 Filed 08/15/07 Page 1 of 6
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deliberately chose not to respond to complaints from PennDOT to plaintiff’s detriment. The

tortious interference, misrepresentation, and punitive damages claims that defendant now attacks

stem from the new allegations. 

STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) allows courts to screen out cases “where a

complaint states a claim based upon a wrong for which there is clearly no remedy, or a claim

which the plaintiff is without right or power to assert and for which no relief could possibly be

granted.” Port Auth. v. Arcadian Corp., 189 F.3d 305, 311-12 (3d Cir. 1999). The Third Circuit

Court of Appeals instructs that “the complaint will withstand a Fed. R. Civ. P. 12(b)(6) attack if

the material facts as alleged, in addition to inferences drawn from those allegations, provide a

basis for recovery.” Menkowitz v. Pottstown Mem’l Med. Ctr., 154 F.3d 113, 124-25 (3d Cir.

1998). In deciding a motion to dismiss, a court is required to accept all of the plaintiff’s factual

allegations as true. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). Thus, a court should

grant a motion to dismiss only when it is “beyond doubt that the plaintiff can prove no set of

facts in support of his claim which would entitle him to relief.” Johnsrud v. Carter, 620 F.2d 29,

33 (3d Cir. 1980). In resolving a motion to dismiss, the court must primarily consider the

allegations contained in the complaint, although matters of public record, orders, and exhibits

attached to the complaint may also be considered. Pension Benefit Guar. Corp. v. White Consol.

Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993).

ANALYSIS

1. Tortious Interference With Contractual Relations

Plaintiff alleges that defendant’s conscious decision not to answer PennDOT’s complaints

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amounts to tortious interference with the contract between plaintiff and PennDOT. Defendant

argues that plaintiff’s tortious interference claim is premised on a “hindrance” theory of liability

that Pennsylvania has not adopted. The Amended Complaint does not specify its theory of

recovery in such terms, and although there is some argument that plaintiff’s claim is based on a

hindrance theory, there is also an argument that the claim is based on an “inducement” theory of

liability, under which defendant is alleged to have induced PennDOT to take adverse commercial

action against plaintiff. Pennsylvania has adopted an “inducement” theory of liability. Adler,

Barish, Daniels, Levin & Creskoff v. Epstein, 393 A.2d 1175, 1183 (Pa. 1978). Because this

issue is before the Court on a Rule 12(b)(6) motion, the Court must make all inferences in

plaintiff’s favor, Menkowitz, 154 F.3d at 124-25, and will assume, as plaintiff argues in its

response to the motion, that plaintiff intends to proceed on an inducement theory. 

A cause of action for tortious interference with contractual relations must contain the

following elements: (1) the existence of a contractual or prospective contractual relationship; (2)

purposeful action intended to harm the existing contractual relationship or prevent the

prospective relationship; (3) absence of a privilege or justification for the purposeful action; and

(4) actual legal damage resulting from the purposeful action. See, e.g., CGB Occupational

Therapy v. RHA Health Servs., Inc., 357 F.3d 375, 384 (3d Cir. 2004). The Amended Complaint

pleads each element: the existence of a contractual relationship, Amd. Compl. at ¶ 10; purposeful

action intended to harm that relationship, Amd. Compl. at ¶¶ 18-20, 40-41; absence of a privilege

or justification, Amd. Comp. at ¶ 42; and resulting legal harm, Amd. Compl. at ¶ 43. Plaintiff

may thus proceed on this count. 

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2. Misrepresentation

Plaintiff asserts a misrepresentation claim arising from defendant’s failure to disclose that

it had decided not to respond to PennDOT’s complaints. Defendant argues that plaintiff’s

misrepresentation claim should be dismissed because it is in essence a fraud claim that does not

contain the particularity Federal Rule of Civil Procedure 9(b) requires, asserting that plaintiff

must specify which fraudulent statements plaintiff relied on and who made them. As plaintiff

points out, however, the misrepresentation complained of here involves failure to disclose

information, thus making any pleading of statements relied upon impossible. 

A fraud claim requires that a plaintiff show: (1) a misrepresentation; (2) material to the

transaction; (3) made falsely with at least reckless knowledge as to its truthfulness; (4) with the

intent of misleading another; (5) reasonable reliance on the statement; and (6) injury proximately

caused by the reliance. See, e.g., Gibbs v. Ernst, 647 A.2d 882, 889 (Pa. 1994). The

representation relied upon need not be an affirmative statement, Prime Bldg. Corp. v. Itron, Inc.,

22 F. Supp. 2d 440, 446 (E.D. Pa. 1998), and may thus be failure to disclose information, as

alleged here. Gibbs, 647 A.2d at 889 n.12. The Amended Complaint contains allegations that

Defendant knowingly made a false material misrepresentation that plaintiff reasonably relied on

to its detriment. See Amd. Compl. at ¶¶ 15-20, 46-50. The misrepresentation claim may

therefore go forward. 

3. Punitive Damages

Plaintiff asserts that defendant’s intentional decision not to respond to PennDOT’s

complaints gives rise to a claim for punitive damages. Defendant argues that plaintiff has not

plead factual allegations sufficient to support a punitive damages claim. Punitive damages are

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available when a party’s conduct is outrageous, meaning actions taken “with a bad motive or

with a reckless indifference to the interests of others.” See, e.g., Smith v. Brown, 423 A.2d 743,

745 (Pa. Super. Ct. 1980) (internal citations omitted). Punitive damages are available under

Pennsylvania law for tortious interference with contract, SHV Coal, Inc. v. Cont’l Grain Co., 587

A.2d 702, 705 (Pa. 1991), and fraud. Bankers Trust Co. v. Dukes, 1997 WL 727616, at *6 (Nov.

21, 1997). 

Plaintiff has accused defendant of taking willful and reckless actions, Amd. Compl. at ¶¶

37, 44, 51, on the basis of a “conscious decision” not to disclose errors on their part that they

knew were “critically impacting” plaintiff’s contract with a third party. Amd. Compl. at ¶¶ 18-

20. The Amended Complaint thus pleads the outrageous conduct necessary to support a punitive

damages award. Whether or not plaintiff’s punitive damages claim will survive a less deferential

standard of review, however, remains to be seen. See, e.g., Montgomery v. Mitsubishi Motors

Corp., 2006 WL 1030272, at *4 (E.D. Pa. Apr. 19, 2006) (dismissing punitive damages claim on

summary judgment). 

Case 2:05-cv-05082-TMG Document 51 Filed 08/15/07 Page 5 of 6
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

FAHS-ROLSTON PAVING

CORPORATION

:

:

:

 Plaintiff : CIVIL ACTION

 :

vs. :

: NO. 05-CV-5082

AMMANN & WHITNEY

PENNSYLVANIA, INC.

:

:

:

 Defendant :

ORDER

AND NOW, this 14th day of August, 2007, after consideration of Defendant’s Motion to

Dismiss (Document No. 46) and plaintiff’s response thereto, it is hereby ORDERED that

Defendant’s motion is DENIED.

IT IS FURTHER ORDERED that Defendant shall file an Answer to the Amended

Complaint within ten days of the date of this Order. 

BY THE COURT:

/s/ Thomas M. Golden 

THOMAS M. GOLDEN, J.

Case 2:05-cv-05082-TMG Document 51 Filed 08/15/07 Page 6 of 6